Definitions of alternative performance measures and other measures according to separate statutory requirements for insurance companies
| Performance measure | Definition | Purpose |
|---|---|---|
| Claims ratio | Claims incurred, net of reinsurance including claims adjustment costs as a percentage of premiums earned, net of reinsurance. | The ratio shows the Company’s expenses for claims incurred in relation to premiums earned, net of reinsurance. |
| Expense ratio | Operating expenses in the insurance operations as a percentage of premiums earned, net of reinsurance. | The ratio shows cost efficiency in relation to premiums earned, net of reinsurance. |
| Combined ratio | The total of claims incurred and operating expenses, net of reinsurance in the insurance operations as a percentage of premiums earned, net of reinsurance. | The ratio shows the Company’s total expenses for claims incurred and operations in relation to premiums earned, net of reinsurance. |
| Direct yield (from beginning of year) | Investment income of the period minus realised gains/losses on disposal of investment assets in relation to the average fair value of the opening balance and closing balance of investment assets and cash and bank balances for the current period. | Evaluates the Company’s ability to generate direct yield (interest income and dividends) on its financial investment assets. |
| Total return (from beginning of year) | Investment income of the period minus unrealised gains/losses on disposal of investment assets in relation to the average fair value of the opening balance and closing balance of investment assets and cash and bank balances for the current period. | Evaluates the Company’s ability to generate returns on its financial investment assets. |
| Technical provisions, net of reinsurance | Calculated as technical provisions (net of outward reinsurance) less reinsurer’s share of technical provisions. | Illustrates how much of the total technical provisions that are attributable only to Solid Försäkring, with deduction of reinsurers’ liability. |
| Adjusted equity (2) | The total of equity and contingency reserves with deduction of assessed real deferred tax on contingency reserve. The assessed real deferred tax is calculated using the corporate tax rate for the relevant period. | Shows the Company’s existing venture capital. |
| Adjusted equity excl. intangible assets (2) (NAV (2)) | Adjusted equity (2) with deduction of intangible assets. | Shows the Company’s existing venture capital excluding intangible assets. |
| Adjusted equity (3) | Adjusted equity (2) plus appropriations, net of tax, of the relevant period with deduction of appropriations attributable to the previous period but paid in the relevant period. | Shows the Company’s existing venture capital adjusted for historical appropriations affecting comparability. |
| Adjusted equity excl. intangible assets (3) (NAV (3)) | Adjusted equity (3) with deduction of intangible assets. | Shows the Company’s existing venture capital excluding intangible assets and adjusted for historical appropriations affecting comparability. |
| Net asset value | Net asset value comprises recognised equity, untaxed reserves and any surplus and deficits in investment assets not recognised in the balance sheet at the end of the period. | Net asset value illustrates the Company’s capital strength, taking into account untaxed reserves. |
| Solvency ratio (from beginning of year, annualised) | The net asset value at the end of the period in relation to annualised premium income, net of reinsurance, of the period. The period’s annualised premium income, net of reinsurance is calculated by dividing the premium income of the period, net of reinsurance, by the ratio of the number of quarters in the period and the number of quarters per year. | Evaluates the Company’s capital strength in relation to the premium income, net of reinsurance. |
| SCR ratio | The eligible capital base of the period to satisfy the Solvency Capital Requirement (SCR) in relation to the solvency capital requirement over the same period. | Evaluates the Company’s capital situation in relation to the regulatory capital requirements. |
| MCR ratio | The eligible capital base of the period to satisfy the Minimum Capital Requirement (MRC) in relation to the solvency capital requirement over the same period. | Evaluates the Company’s capital situation in relation to the regulatory minimum capital requirements. |
| Return on average adjusted equity (2) (RoE (2)) (from beginning of year, annualised) | The period’s annualised net profit after tax in relation to the average of the opening balance and closing balance of adjusted equity (2) for the relevant period. The period’s annualised net profit after tax is calculated by dividing the period’s net profit after tax by the ratio of the number of quarters in the period and the number of quarters per year. | Evaluates the Company’s profitability in relation to its existing venture capital in terms of adjusted equity (2). |
| Return on average adjusted equity excl. intangible assets (RoNAV (2)) (from beginning of year, annualised) | The period’s annualised net profit after tax with the addition of the period’s amortisation of intangible assets after tax in relation to the average of the opening balance and closing balance of adjusted equity excluding intangible assets (2) for the relevant period. The period’s annualised net profit after tax with the addition of the period’s amortisation of intangible assets after tax is calculated by dividing the period’s net profit after tax with the addition of the period’s amortisation of intangible assets after tax by the ratio of the number of quarters in the period and the number of quarters per year. | Evaluates the Company’s profitability in relation to its existing venture capital in terms of adjusted equity excluding intangible assets (2). |